Rise in South Africa hotel prices

22 February 2011

22 February 2011 | Lindsay Clark

A shortage of hotel rooms is causing costs to rocket in South Africa, a report has found.

The rise in hotel prices was caused by more demand both at home and abroad, according to Margaret Bowler, director of global hotel relations at business travel firm Hogg Robinson Group.

The group’s research shows the highest regional rise in hotel prices across the globe was recorded in Africa. This was primarily aided by positive growth in South Africa. Average room rates in Johannesburg increased by 17 per cent when paying with British pounds, while the cost of rooms in Nigeria and Kenya rose by 13 per cent and 11 per cent respectively. When measured in local currency, the average rate growth was single digit, the report said.

Bowler said that hotel companies have been struggling to keep up with demand. “There have been hotels opening, but at the moment they cannot open quickly enough, particularly in places like Johannesburg. Of all the places, this is the one that the corporates are going to.”

Price rises caused by an influx of visitors to the World Cup in 2010 have been sustained in South Africa, she said. “The first thing we did was to see if it was all related to the World Cup. Yes, they did very well, but it is not a spike just for that reason. It has continued with demand.”

The southern Africa region as a whole has also seen a growth in demand, Bowler said. “It is not just South Africa where hotel rates are rising. Some of that is going to be exchange rates. Hotel prices overall are going up tremendously.”

Travellers within Africa may not be paying the same prices as those from other continents because of the variety of accommodation available, she said. “The international traveller tends to stay in a branded, top-end hotel. In South Africa and Africa there are a lot of independent hotels, so there are plenty of options for the domestic traveller too.”

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